Experts say the average payment has surpassed $700 a month, with the cost of a new set of wheels reaching record highs.
The average purchase price on a new car sold for a record of just over $48,000 in the month of June – that’s nearly a 13% jump from last year.
“It’s a combination of things and you just never know who’s to blame for it,” said Hedrick’s Chevrolet co-owner Brett Hedrick.
Hedrick says consumer demand is at an all-time high as dealerships continue to tackle a microchip shortage and supply chain issues brought on by the pandemic.
That means there just aren’t as many cars as there used to be and the ones they do get don’t last long.
According to Hedrick, his lot would typically carry an inventory of around 300 new vehicles but those numbers have dropped significantly since the start of COVID.
The trend has moved toward more high-end car purchases with luxury vehicles making up 18% of all new car sales last month nationwide.
“What you see is cars are more expensive now and what goes into them. The electric market is here to stay and it’s a percentage, but those vehicles are going to cost a little bit more,” says Hedrick
High gas prices are also driving the fuel-efficient car market as families are willing to spend a little more on a vehicle if it means saving on trips to the pump.
Hybrids as well as electric car prices all jumped from $2,000 to $4,000 across the board last month.
“Everybody has a need, if they’re on the road a lot and they’re paying $6.50 for gas for some people, that’s going to change their mind for what they’re going to drive,” says Hedrick
And it’s not just the price of new vehicles that are surging, the low inventory has driven up the sale of used cars.
“That’s why the used market is so hot, somebody comes in and says I don’t want to pay $70k for the “X Model”, I’ll pay $40k or $50k for the two or three-year-old model,” says Hedrick
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